With a background in economics and public policy, I've covered domestic and international energy issues since 1998. I'm the editor-in-chief for Public Utilities Fortnightly, which is a paid subscription-based magazine that was established in 1929. My column, which also appears in the CSMonitor, has twice been named Best Online Column by two different media organizations. Twitter: @Ken_Silverstein. Email: ken@silversteineditorial.com

Obama's Offshore Energy Policy Could Rescue Oil And Gas Explorers

The Obama administration may think so, having shifted gears in recent weeks and removed potential barriers to more drilling off the coast of the Atlantic Ocean. This is in addition to earlier moves that eased the steps for developers to pursue oil and gas deposits in the Gulf of Mexico and possibly off the coast of Alaska.

For a White House that has targeted oil company tax breaks and toughened drilling safeguards in the wake of the BP disaster, it’s a change of pace. But it is actually part of a previous plan — an EnergySecurity Trust Fund — to redirect some of those oil and gas revenues toward green energy ventures. That’s an idea that has resonance among key lawmakers on energy panels from oil and gas states.

What’s immediately at stake? Producers can use a technologically savvy device called sonic cannons that shoot off pulsating sound waves that hit the bottom of the sea floor and that return to the top, all of which is captured by computers that interpret the data and create three-dimensional drawings. Bottom line: Those developers can get a pretty good handle on the oil and gas that is offshore.

The president’s consent gives producers a chance to perform such tests between Delaware and Florida, although each state could regulate the processes. Florida, for example, would not want any drillers within eyesight of beach goers who flock to the state and bring with them tourism dollars.

It’s a potentially rich vein for both the oil and gas producers as well as the states. The Bureau of Ocean Management estimates that 4.72 billion barrels of recoverable oil and 37.5 trillion cubic feet of recoverable natural gas exists from Maine to Florida.

What companies benefit? Among those already active in the United States are Nabors IndustriesNabors Industries, Diamond Offshore Drilling Inc., Noble Energy Co, Chevron Corp., ExxonMobil Corp. and BP.

For better or worse, relaxing offshore exploration policies is something that would apply beyond the eastern seaboard and to other the oil-and-gas rich basins. Consider: The Minerals Management Service has said that altogether, 86 billion barrels of recoverable oil and 420 trillion cubic feet of recoverable natural gas lies within all those bodies of water: Gulf of Mexico, Arctic Ocean and Atlantic Ocean.

To this end, the U.S. Bureau of Ocean Energy Management will offer more than 21 million acres for oil and gas development near the shores of Texas. Meanwhile, it is potentially eying the Arctic Ocean off the coast of Alaska, saying that it has an abundance of resources with a “unique and sensitive environment.”

“Offshore energy exploration and production in the Atlantic could bring new jobs and higher revenues to states and local communities, while adding to our country’s capabilities as an energy superpower,” adds the American Petroleum Institute’s Upstream Director Erik Milito, in a statement.

To be sure, the environmental community is dismayed by the president’s pivot on offshore energy policies. For starters, the sonic sound waves that help size up the potential oil and gas deposits are so loud — think of listening to several jets sitting on a runway and being unable to escape — that they disorient and disturb sea life.

And then they point to the fact that spills do occur — just as one did with BP in 2010. There, the legal disputes are ongoing, all to settle up with those whose livelihoods and whose lifestyles were turned upside down by the disaster.

Before the BP oil accident, the White House had been drawing up such plans not just to drill for oil and gas but also to build wind farms. Then the BP blowout occurred, enabling the release of 200 million gallons of oil into the Gulf. The administration decided to step back, assess its policy and determine a way forward.

In the four years since the spill, the Obama administration has beefed up the existing regulations, increased the fines and added more rules meant to minimize the possibility of accidents. The laws aim to ensure that “blow-out preventers” and the cemented seals that cover them actually work before exploration begins.

But a report issued by the National Academy of Engineering and National Research Council has cautioned the U.S. government to give considerable thought to its relaxing offshore drilling. Multiple things went wrong before the BP oil spill, they say, including the fact that regulators didn’t properly do their jobs.

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——-” What’s immediately at stake? Producers can use a technologically savvy device called sonic cannons that shoot off pulsating sound waves that hit the bottom of the sea floor and that return to the top, all of which is captured by computers that interpret the data and create three-dimensional drawings. Bottom line: Those developers can get a pretty good handle on the oil and gas that is offshore.”——-

Great, let’s kill off all the whales and dolphins for a little oil. Totally disrupt their means of hunting and communication.

fredlinn – We are now seeing the Energy RUSH to deplete the reserves of the USA so that BIG Energy can make as much profit from it as possible, then then USA will become yet another country with higher priced energy because our Leaders chose to receive large campaign donations instead of doing what is right for the Country, protecting our energy Future.

——” The president’s consent gives producers a chance to perform such tests between Delaware and Florida, although each state could regulate the processes. Florida, for example, would not want any drillers within eyesight of beach goers who flock to the state and bring with them tourism dollars.”——-

fredlinn – At least to the Obama Administration and all their BIG Donors, the rest of US just have to learn to deal with it and/or vote for someone that will even screw things up worse after getting elected next time.

———-” While Obama’s go-slow offshore energy policy is part of a larger energy agenda, the acceleration of energy drilling is off-putting to his political base. But oil and gas developers are welcoming the position, although they are asking the president to speed up the pace to increase the odds of new exploration.”——–

——” In the four years since the spill, the Obama administration has beefed up the existing regulations, increased the fines and added more rules meant to minimize the possibility of accidents. The laws aim to ensure that “blow-out preventers” and the cemented seals that cover them actually work before exploration begins.”——

We had rules, regulations and fines for 4 years BEFORE the BP spill—-and they were not enforced and ignored.

Tough calls. - I’d rather get our oil from the USA than from those funding terrorism…and yes, oil is fungible. - The sonic boom impact on whales nad marine life has been known and studied for awhile now. Surely the regulators can get that one issue right. - The real answer is policies that accelerate the transition to natgas, electric, bio, and other non-petroleum transportation fuels.

TJC2 – If we did not open these area and kept them as a option for the future, then we would be doing now what you suggest; as it is now we are delaying making the USA cleaner with non nuclear GREEN energy so that BIG Energy can continue to profit off dirty technology…

—–” – The sonic boom impact on whales nad marine life has been known and studied for awhile now. Surely the regulators can get that one issue right.”——–

You have more faith than I do.

It seems to me that the whole regulatory system is entirely centered on the wants of industry and economic factors.

——” – The real answer is policies that accelerate the transition to natgas, electric, bio, and other non-petroleum transportation fuels.”——

A good start would be to only allow sales of vehicles that are be bi-fuel or multi-fuel capable. Put flexible fueled vehicles on the roads, and let consumers choose for themselves what fuel they want to use.

One thing about the opening up of the East coast of the US for new drilling, if there is a major leak/spill at least the ocean currents will tend to carry it away from the USA much like Fukushima’s ongoing radioactive pollution of the Pacific Ocean is moving away from Japan, at least until it encircles the entire Pacific basin.